By almost any metric the Six Party Talks have been a failure for the U.S. and a success for North Korea. Since returning to the Six Party Talks in October 2006, North Korea has completed two additional nuclear tests, and in March 2014 threatened to carry out a new kind of nuclear test. North Korea’s nuclear program has been ongoing, and in 2010 it unveiled its uranium enrichment program.[i] From 1995 to 2008 the U.S. provided North Korea $1.3 billion in aid, mostly in the form of food aid and energy assistance. The energy assistance was given as part of the Six Party Talks framework and was contingent on North Korea freezing its plutonium related nuclear sites.[ii] As for the food aid, instead of using it to meaningfully fight hunger in North Korea, the Kim regime doled it out based on political reasons. Rather than using the food aid to supplement food imports, the Kim Regime used the aid as a substitute and cut back on its own imports, using the money saved for luxury items and military spending.[iii]

Another major benefit that North Korea achieved during the course of diplomacy was being delisted from the State Sponsors of Terror list. Two days before North Korea was delisted, they had refused inspectors entry into the Yongbyon nuclear reactor and were threatening to increase their nuclear production and conduct another nuclear test. By taking North Korea off of the State Sponsors of Terror list it made Pyongyang eligible for aid and loans from international organizations like the IMF, World Bank, and the Asian Development bank. In exchange for the delisting, America gained access to the Yongbyon reactor, and some academic sites, but did not gain access to the site of the 2006 nuclear test, or any military sites that might be involved in the North Korean nuclear program.[iv]

Throughout the North Korea nuclear negotiations the US had little leverage. North Korea was able to maintain the upper hand throughout, gaining economic benefits, and despite its size and weak economy, managed to be involved in talks with five major powers in exchange for illusory concessions that were easily reversed. The only point during the negotiations where America had significant leverage was during the BDA operation time frame. North Korean negotiators realized this, and at times were surprisingly candid about it. In 2005 during a meeting of the Six Party Talks after the BDA action a North Korean official told Victor Cha, the U.S. National Security Council Director for Asian Affairs, “You Americans finally have found a way to hurt us.”[v] Instead of using this leverage to gain real concessions from the North Koreans on the nuclear issue, or on the illicit financial issues like counterfeiting that were the impetus for the BDA action, the U.S. government, led by the State Department and Assistant Secretary Christopher Hill, actively worked with Pyongyang to return its dirty money.

5. Moving Forward: A Strategy Focused on Obtainable Goals

North Korea’s financial situation today is similar to how it was before the BDA action. The new leader, Kim Jong-Un has not ended the criminal activities or shut down Office #39. The traditional state targeted bilateral and UN Security Council mandated sanctions are in place, but Kim Jong-Un’s regime just finished building the Masikryong Ski Resort, for an estimated cost of $35 million. The resort features high quality Canadian snow mobiles, Italian snow plows and Swedish snow blowers, all despite international sanctions banning the sale of luxury items to North Korea. There has also been a recent building boom in Pyongyang.[vi] North Korean finances remain opaque, but there is strong evidence that regime still relies on illicit means to support itself.

One major source of North Korean profit continues to be the underground arms trade. In July 2013, officials in Panama seized a North Korea ship, the Chong Chon Gang that was carrying surface to air missile components, ammunition, two disassembled MiG-21 aircraft, 15 engines for MiG-21 aircraft and other arms related material. All of these components were hidden under 250,000 sacks of sugar. The arms belonged to the Cuban government, who claimed they were sending it to North Korea to be repaired, but this action violated numerous UN Security Council resolutions. The fact that the North Korean crew had taken so much effort to hide the munitions, and that a secret memo was found on the ship instructing the captain on how to hide the contraband and what code words to use to avoid detection, shows a willingness to flout the sanctions regime.[vii]

America, and other powers, should also be able to modulate expectations about how much North Korea is willing to give up through the process of diplomacy for things like aid or trade normalization. The state run media, KCNA, offered this advice in 2010, “Those who talk about an economic reward in return for the dismantlement of its nuclear weapons would be well advised to awake from their daydream.”[viii] Pyongyang has remained consistent on this point, and for a society that has declared a military first policy is unlikely to change their position in the near future. Rather than maintain a singular focus on an issue that is irresolvable, there are other pressing concerns related to North Korea that the United States and the International Community could have influence on. North Korea needs access to the international financial system to move the money it receives from its arms sales and related activity. Also, if countries that trade arms with North Korea have their finances threatened, it will discourage other countries from illegally participating in North Korea’s arms trade. Another vital interest is human rights. North Korean leadership has billions in secret European accounts, if that money can be found and frozen, its release can be made contingent on human rights gains, or released only for the monitored purchases of things like food, medicine and other humanitarian supplies.

The BDA operation, before becoming a political tool used by competing officials, was intended to be a law enforcement operation attacking North Korean illicit finance. BDA was working well and meeting its stated goal, but it didn’t stand a chance against hardliners who wanted to force regime change and an end to talks, or diplomats who were willing to trade concessions for a chance to sign a deal. This disunity allowed North Korea to disarm a credible threat to its existence while maintaining and strengthening both its nuclear program and its criminal activities like counterfeiting American currency. In the future, if America cannot decide on workable strategic goals, and present a unified front, North Korea will maintain the upper hand in negotiations.

Nice article, Leon. I learned a lot. Yet, I wish the Bush administration had been more flexible or tolerant enough to give the parties a chance to actually design the action plan and implement the September Joint statement before designating BDA for money laundering. Though many blame North Korea for its repeating provocative negotiation tactics, I see the Bush administration having done the same.

I’m glad you enjoyed it. Early on in the Bush administration they completely changed the plan from what the Clinton administration was doing. That was probably a mistake, and they could have played that out a little more to see if there was any chance North Korea would be sincere, but I believe the whole was a lost cause in terms of negotiations. North Korea had too much to lose, still has too much to lose, by giving up its nuclear weapons, and offers of aid or trade pale in comparison the feeling of security from the nukes. It isn’t that North Korea is a more provocative negotiator, although they really truly are, but that they are much more successful and strategic negotiators than others.